Can I have a SEP-IRA and a Solo 401k with a ROTH account feature at the same time?
Yes you can but the two plans are treated as one for purposes of determining your maximum contribution limits. Since the Solo 401k allows for greater deductions on less income, having both may not make the most sense. Further, according to Mr. Boldragini ID#31-08350 of the IRS if you want to have both a SEP-IRA and a Solo 401k, you may not contribute to both in a given tax year unless you used a plan document other than the IRS model document for the SEP-IRA (i.e. IRS Form “5305-SEP”). You must have used a prototype plan document or an individually designed plan document for the SEP-IRA, which allows for multiple plans and apportionment and aggregation of contributions. However, you do not need to terminate the SEP-IRA in order to open or maintain a Solo 401k, (you simply cannot contribute to the SEP-IRA in the same tax year as your contributions to a Solo 401k). You can keep an existing SEP-IRA dormant (no contributions) alongside a Solo 401k. (This true even if the dormant SEP-IRA is
Related Questions
- Since I make designated Roth contributions from after-tax income, can I make tax-free withdrawals from my designated Roth account at any time?
- Can I have a SIMPLE-IRA and a Solo 401k plan with a ROTH account feature at the same time?
- Can I have a SEP-IRA and a Solo 401k with a ROTH account feature at the same time?
